The decision to axe the STV2 digital channel, and the loss of 25 related jobs plus another 34 posts in the news operation, represents a strategic sea-change for the broadcast company.

Incoming chief executive Simon Pitts is clear that he wants to concentrate on STV’s core as Scotland’s commercial broadcaster, as well as producing programmes for other channel clients including the BBC.

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The creation of STV2 remains something of a mystery. What were STV’s motives? The company bid successfully for the Glasgow and Edinburgh “local TV” franchises, and later added Aberdeen, Dundee and Ayr into a new digital network for Scotland.

STV Glasgow was rebranded as STV2 in April 2017

Local TV was the brainchild of former culture secretary Jeremy Hunt, who reportedly hit on the idea while visiting the United States, where local cable channels are known to thrive. There was little or no evidence of demand for it here.

The idea in Scotland seemed less attractive. In fact, “Local TV” as it was known originally, felt like a solution in search of a problem. Moreover, to award such franchises to the dominant national broadcaster seemed perverse, especially when the new channel was branded under the STV name and sold to advertisers as a new national service.

For various reasons, STV refused its right to access BBC licence fee funds towards the franchises, and that cash has now lapsed. It could have been worth as much as £2m over three years, and would not be available to any new bidders.

However, it seems unlikely that a serious new bidder will appear to run any of the local franchises, meaning some significant spare broadcasting spectrum will be left unused in Scotland.

STV blamed the decision partly on the planned BBC Scotland channel, confirmed to be launching next February. STV had lobbied strongly against the £30m digital channel, claiming its creation would be anti-competitive. That case was dismissed by the regulator Ofcom, whose research found that the possible advertising income to be lost by STV in relation to the BBC channel was not significant.

In market and editorial terms, STV2 was a brave attempt at creating something new – local TV for four cities plus Ayrshire – but at the end of the day its audience remained tiny. The new broom at company HQ in Pacific Quay has spotted an obvious place to save money.

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STV today were at pains to say that some of the £2m savings will be reinvested in the channel’s core activities, as well as online. The company plans to spend £15m on original content over the coming three years. Small comfort to those facing redundancy today. But the truth is STV2 was always a marginal enterprise.